TaxTMI 
TaxTMI 
2026 (8) TMI 1577
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....ioner of Income-tax (Appeals) [in short 'NFAC/Ld.CIT(A)'], dated 23.04.2026, which in turn arises out of penalty order passed by the Assessing Officer u/s 271B of the Income Tax Act, dated 21.08.2025. 2. Although, this appeal filed by the assessee, for the Assessment Year 2017-18, contains multiple ground of appeals, however, at the time of hearing, I have carefully perused all the grounds raised by the assessee and I note that solitary grievance of the assessee is that ld.CIT(A) grievously erred on facts as also in law in levying penalty Rs. 1,50,000/- u/s 271B of the Act, and the penalty has been imposed without proper appreciation of the facts, evidence and submission furnished by assessee and is therefore unjustified. 3. Succinctl....
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....re initiated. The Penalty notice for penalty under section 274 r.w.s. 271B of the Income-tax Act, 1961 was issued on 25.02.2025. 4. In response to the penalty notice, the assessee submitted before the assessing officer that books of accounts were audited and audited books of accounts were uploaded during the assessment proceedings on Income tax portal, however, assessing officer ignored the same. The assessee, took Bench, through paper book page No.33, where the audit report is placed. The assessee also explained that he got books of accounts audited by a qualified chartered accountant and made the sufficient compliance. The relevant evidence showing the submission of the audit report during the assessment proceedings and during the pena....
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....rmers, consumers who are generally make payment in cash. Most of purchases were made with the wholesalers or manufacturers. The assessee has been regularly filling return of income since the commencement of business, that is, for more than last 10 years. The books of accounts have been duly audited u/s. 44AB of the Act since commencement of business. In fact, each and every financial transaction are being noted in the books of accounts of the assessee. The Books of accounts are audited u/s. 44AB of the Act. The transactions mentioned into the notice are reflecting in the books of accounts of assessee. Net income of the year was Rs. 3,83,480/-. The assessee paid advance tax Rs. 12,000/- on 19/12/2016. During the original assessment proceedin....
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....ction 271B provides for penalty where the assessee fails to get its accounts audited or furnish the audit report as required under section 44AB of the Act. Importantly, section 271B of the Act, uses the expression "may direct", and not "shall direct". Therefore, the levy of penalty is not mechanically and automatic. Section 273B of the Act, further provides that notwithstanding anything contained in section 271B, no penalty shall be imposable where the assessee proves that there was "reasonable cause" for the failure. 9. I note that main aspect to be seen is that the audit report had been obtained within the prescribed time, and whether the statutory audit had actually been completed within time is material to the applicability of sectio....